For Turkey, 2021 was marked by a freefalling currency, the lira, and record-high
inflation. The government's monetary policy has sent the country into economic turmoil.
And, as Nick Schifrin reports, soaring prices have hurt Turks from all walks of life.
NICK SCHIFRIN: For 45-year-old Hasan Turan, the work never ends. He's made a living
and supported his family as a janitor for 20 years. But, these days, one job is not enough.
HASAN TURAN, Janitor and Delivery Man (through translator):
I'm trying to find a fourth apartment building to clean.
The price increases have affected us a great deal, so I will have to take more jobs.
NICK SCHIFRIN: His newest additional job at a small grocery store in Eastern Istanbul.
He takes phone orders, picks produce for upper-middle-class customers, and delivers them on
an electric scooter. This is his 15th hour of work today. Some days, he delivers 20 orders a day.
HASAN TURAN (through translator): I'm struggling to make ends meet. The prices have gone up,
so I had to take up extra work. I'm doing a part-time job out of necessity.
NICK SCHIFRIN: It's a necessity just to feed his family. At the farmer's market,
Hasan and his wife, Kiymet, struggled with what to buy and what to leave.
HASAN TURAN (through translator): Can we have a kilo of tangerines?
KIYMET TURAN, Resident of Afghanistan (through translator): No, no,
half-a-kilo will do. Let's buy just half-a-kilo.
NICK SCHIFRIN: One pound of tangerines, four pounds of potatoes was all they could afford.
KIYMET TURAN (through translator):
The prices are too high. I mean, we can't afford to buy all we need. In the past,
I used to buy a lot, cook a lot. Now I have to buy in small quantities and try to get by.
NICK SCHIFRIN: Turkey is suffering its highest inflation in nearly two decades.
From December 2020 to December 2021, prices rose more than 36 percent, everything from food to gas.
The economic crisis is everywhere. In December, bread lines stretched around the corner.
And as the Turkish lira plunged, Turks around the country rushed to change money into U.S. dollars.
But President Recep Tayyip Erdogan says it's part of his plan.
RECEP TAYYIP ERDOGAN, Turkish President (through translator): Hopefully,
we will eliminate this swelling as soon as possible,
and prevent our nation from being under the burden of unfair price increases.
NICK SCHIFRIN: The economic pain runs deep.
Extensive borrowing and previous interest rate cuts were already driving up prices.
But analysts say Erdogan's recent medicine is making the country sicker.
Under his pressure, since September, Turkey's Central Bank slashed interest rates four times.
SONER CAGAPTAY, Director, Turkish Research Program,
Washington Institute for Near East Policy: Anyone who took econ 101 in college would know,
if your inflation climbs up, interest rates have to follow that. Erdogan is doing the opposite.
NICK SCHIFRIN: Soner Cagaptay is the director of the Washington Institute's
Turkish Research Program and author most recently of "A Sultan in Autumn."
He says Erdogan's motivation is difficult to know,
but, in the last few months of 2021, the lira lost almost half of its value,
in December, 18.4 for $1. And a weak lira can boost tourism and Turkish exports.
SONER CAGAPTAY: Erdogan is maybe trying to create what is called growth out of contraction.
In other words, let the economy crash and burn, and that will make Turkish exports
very affordable, because the lira has lost its value, and the country will have a
restored growth driven by strong export sector and also demand for Turkish tourism and services.
NICK SCHIFRIN: There are some signs of increased tourism. Last month, Bulgarians
by the busload arrived in Istanbul to buy cheap groceries and bargain bazaar Christmas gifts.
And Erdogan says exports are at an all-time high.
Turkish authorities have also raised the minimum wage by 50 percent. And a new plan pays Turks
to keep their bank deposits in lira. But the depreciation is still large, as is the anger.
In November, protesters called for the government to resign and the police to back down.
How could the economic crisis become a political crisis?
SONER CAGAPTAY: If Erdogan does not restore economic growth,
he's not going to win the next elections in 2023. We're going to see the country's
economic resilience pushed back, and also a more unified opposition.
So, I would say this is the most important turning point in President Erdogan's career. The unusual
part of it is that Turkey's citizens lived under Erdogan for nearly two decades and experienced
prosperity that they had never witnessed before. That income level and living standards
is disappearing in front of the eyes of a lot of citizens. Voters are turning away from him.
NICK SCHIFRIN: And Erdogan's turning inward.
He fired multiple officials who resisted his unorthodox economic policies,
and his government filed criminal complaints against Turks who criticized his policies online.
SONER CAGAPTAY: At this stage,
I think the only way for him to stick to power -- it looks like he's not going to
be able to restore strong economic growth -- is by becoming more autocratic only.
NICK SCHIFRIN: That boosts leading opposition politicians, like Istanbul Mayor Ekrem Imamoglu,
who challenge Erdogan's nearly 20-year rule.
EKREM IMAMOGLU, Mayor of Istanbul, Turkey (through translator):
This current process is not merely an economic crisis. I want to underline
that it is a political crisis. I see this as a reflection of the inability to run the country.
NICK SCHIFRIN: And it's hard to run a family. The Turans have cut back on food,
cut out any new clothes, in order to afford one essential need, their daughters' tuition;
12-year-old Nisa in middle school, and 19-year-old Irem is in college.
HASAN TURAN (through translator): I can't say no to their needs, because it is related with their
education. They have to stay in school. We have to make personal sacrifices to meet their needs.
NICK SCHIFRIN: And maybe one day solve the country's crisis. Irem is studying economics.
For the "PBS NewsHour," I'm Nick Schifrin.